Bicycle industry seeks import duty reduction

Bicycle industry in Ludhiana, one of the oldest and largest bicycle cluster in the country, has sought reduction of import duty in the forthcoming budget on various grades of steel to zero per cent.

"We have sought from the Union Finance Minister in the coming budget to reduce the import duty on steel such as scrap and primary steel, which ranges between 5 and 12.5 per cent to zero per cent," a local bicycle manufacturer of Kelvin brand and President of Indian Bicycle Manufacturer Association Satish Dhanda said.

"Therefore, it has become necessary for the government to support the industry by way of reducing duty on raw material as well as refunding taxes on export on the basis of actual expenditure in a bid to compete at domestic and global level," he said.

In 2003-04, the country's bicycle production stood at 1.20 crore, which is likely to plummet to less than one crore bicycles by the end of this fiscal just because of rising input cost.

In addition to it, the export of bicycles, which were at Rs 950 crore in 2003-04 is expected to come down to Rs 700 crore by the fiscal end, an industry analyst said.

Comparing the cost of different types of steel used in China with that of India in making a bicycle, Dhanda said, the bicycle steel tube, which is available in China at Rs 22500 per metric tonne, could be procured at Rs 36000 per MT in India. Similarly, CRC sheet and MS round in China are cheaper by Rs 14,000 and Rs 8,000 per MT as against in India.

The industry has further demanded that steel producers should be barred from fixing the prices on the basis of import parity rate as this practice also contributes in spiralling input cost.